The home secretary says ‘our new immigration system will give us control of the people coming here’.
Photograph: Jeff J Mitchell/Getty Images

The government is to launch its first major investigation into migration from the EU in order to lay the foundations for a new immigration system, though critics have questioned why the work has begun more than a year after the EU referendum.

The home secretary, Amber Rudd, is to commission the independent Migration Advisory Committee to carry out a detailed analysis of the economic and social contributions and costs of EU citizens in Britain.

Announcing the study, Rudd also said the government would seek a transitional arrangement, likely to involve the continuation of free movement, to ensure there would be no “cliff edge” for employers or EU nationals in the country.

However, the study will not report back until September 2018 – seven months before Britain is set to formally exit the EU in March 2019.

The Labour MP Heidi Alexander, a leading supporter of Open Britain, which campaigns for a soft Brexit, said the timing of the report was concerning. “It beggars belief that the government have taken a year to get round to asking for expert evidence on the role played by EU nationals in our country,” she said.

“Our immigration policy has been governed by anecdote and scaremongering, rather than evidence, since the moment Theresa May set foot in the Home Office in 2010. The timing of this announcement shows the total lack of preparation and understanding that has typified this government’s attitude to Brexit so far.”

Ed Davey, the Lib Dem home affairs spokesman, also said the study was a year too late. “The government needs to explain why this study wasn’t commissioned a year ago, directly after the referendum,” he said.

“The NHS, businesses and universities that depend on European citizens need answers now, not in another 14 months’ time. Ministers must explain how their negotiations will minimise the damage Brexit will do to our economy and public services.”

The MAC’s chairman, Prof Alan Manning, has been asked to produce interim reports to guide Home Office officials attempting to draw up a post-Brexit immigration regime that will bring an end to free movement but will not cause economic damage or vital skills shortages.

The committee will also be asked to examine:

Which sectors are most reliant on EU labour.

The impact of a reduction in EU migration and the ways in which both business and the government could adjust to this change.

Whether there is any evidence that the availability of unskilled labour has led to low UK investment in certain sectors.

Whether there are advantages to focusing migrant labour on high-skilled jobs.

Rudd said: “We will ensure we continue to attract those who benefit us economically, socially and culturally. But, at the same time, our new immigration system will give us control of the volume of people coming here – giving the public confidence we are applying our own rules on who we want to come to the UK and helping us to bring down net migration to sustainable levels.”

Writing in today’s Financial Times Rudd added the migration study “will be a chance for businesses and employers to express their honest opinions, independently of the government.

“It is critically important the views of each industry are reflected accurately in this evidence ... I also want to reassure businesses and EU nationals that we will ensure there is no “cliff edge” once we leave the bloc.”

Official statistics show net long-term immigration by EU citizens – the balance between arrivals and departures – was running at an estimated 133,000 last year, a fall of more than a quarter on 2015.

Josh Hardie, deputy director of the Confederation of British Industry, said any new system had to protect the benefits of immigration while also restoring public confidence. He said the review was “a sensible first step”.

However, Hardie also said the pressure was on to provide certainty for UK employers and EU citizens already in Britain. “Businesses urgently need to know what a new system will look like – during transition and afterwards,” he said.

Separately, peers have warned that the UK faces an “unacceptable risk” if the government does not replace European arrest warrant arrangements in time for Brexit.

The Lords EU home affairs sub-committee warned against allowing any operational gap to occur involving extradition procedures after Britain’s planned withdrawal from the bloc in March 2019.

It said it “does not seem at all clear” how Britain could remain part of the present warrant system because it is overseen by the European court of justice (ECJ), which the government insists should have no jurisdiction over UK matters after Brexit.

The peers’ report expresses concern that a “cliff-edge” situation could occur, stating that an “operational gap between the European arrest warrant ceasing to apply and a suitable replacement coming into force would pose an unacceptable risk”.

It says Britain could follow the examples of Norway and Iceland and seek a bilateral extradition agreement with the EU that broadly mirrors the current warrant system and contains provisions for a political dispute resolution mechanism.

But peers noted that the agreement with the two countries had taken years to negotiate and still had not come into force.